Cost-Benefit Analysis of Digital Banking Adoption Among Small and Medium Enterprises in Jimeta-Yola Metropolis, Adamawa State, Nigeria

Adamu Abdulmalik; Ishaq Arabo; Rilwan Bello

doi:10.56201/ijebm.vol.12.no9.2026.pg137.151

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Cost-Benefit Analysis of Digital Banking Adoption Among Small and Medium Enterprises in Jimeta-Yola Metropolis, Adamawa State, Nigeria

Adamu Abdulmalik, Ishaq Arabo, Rilwan Bello

Abstract

Digital banking has transformed commerce globally, yet small and medium enterprises in developing regions exhibit uneven adoption patterns, with limited empirical evidence on the actual economic returns of such investments. This study investigates the costs, benefits, and net economic impact of digital banking adoption among SMEs in Jimeta-Yola Metropolis, Adamawa State, Nigeria. A mixed-methods sequential explanatory design was employed, combining quantitative survey data from 150 SMEs across trade, services, and manufacturing sectors with 15 in-depth qualitative interviews. Data covered direct and indirect adoption costs, transaction efficiency, revenue changes, and operational savings over a 12-month period. Cost-benefit metrics including Net Present Value , Return on Investment , and Benefit-Cost Ratio were computed. Findings reveal that 68.4% of SMEs have adopted at least one digital banking service, primarily mobile money and POS terminals. Adoption yielded an average revenue increase of 18.2% and transaction time savings of 4.3 hours weekly. The average payback period for initial investment was 8.5 months, with a mean ROI of 47.3% within the first P-ISSN 2695-186X year. However, significant barriers persist, network unreliability (76.8%), transaction charges (71.2%), and cybersecurity concerns (62.4%), limiting full adoption. Digital banking adoption delivers positive and measurable economic returns for SMEs in Northeast Nigeria. The study recommends reduced transaction fees, improved network infrastructure, and targeted digital literacy interventions to unlock the full economic potential of digital financial inclusion.

Keywords

Digital bankingSMEscost-benefit analysisfinancial inclusionmobile moneyPOS terminalsJimeta-YolaNigeria

References

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Cost-Benefit Analysis of Digital Banking Adoption Among Small and Medium Enterprises in Jimeta-Yola Metropolis, Adamawa State, Nigeria

Abstract

Keywords

References

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